FINA Committee Report
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Bloc Québécois Dissenting Opinion: A report that ignores Quebec’s economic interests First of all, the Bloc Québécois wants to thank all the witnesses who took part in the pre-budget consultations. The Finance Committee’s report on the pre-budget consultations has once again proven that Quebec’s economic interests and priorities will never be respected within the Canadian federal framework. Steered by the Conservatives, the Finance Committee has adopted a report that is indifferent to Quebec’s economic reality. To meet Quebec’s specific needs it is therefore the duty of the Bloc Québécois to make recommendations to the government that should be incorporated into its next budget. The economy of the Quebec nation is a green economy, driven by industries of the future, shaped by the Quebec culture, concerned about the lot of the disadvantaged, and marked by the continuing importance of traditional sectors everywhere on its territory.
Quebec is a leader in the fight against climate change in North America, and its economic growth depends on a bold conjunction of the economy with the environment. The Finance Committee, dominated by political parties susceptible to the demands of Big Oil, was unable to come up with a plan for fighting GHG emissions that was consistent with Quebec’s interests. The Committee refused to recommend to the government that it bring in an ambitious, daring and visionary climate change plan, as proposed by the Bloc Québécois. Instead, the Committee preferred to recommend a few toothless generalities. Our plan included absolute and binding GHG reduction targets, with 1990 as the reference year; our targets were based on a territorial approach and on a carbon credits trading mechanism operated through a carbon exchange. Unfortunately, Canadian interests once again took precedence over Quebec interests, and the Committee preferred to implicitly support the development of the tar sands, which will deprive businesses in Quebec of the compensation they deserve for the efforts made by Quebec’s manufacturing sector to reduce GHG emissions. The Bloc Québécois is pleased that the Committee adopted a comprehensive strategy for promoting the use of electric vehicles. But will the Conservative government get the message? Will it take advantage of its upcoming budget to go ahead with such a strategy? It seems unlikely. It is obvious to us that the Committee placed the interests of Ontario steel mills and other industries reliant on coal mined in the Canadian West ahead of organizations and industries that want to make the transition to new ways of doing things. This explains the absence of a strategy to encourage the use of wood in federal construction projects. In addition to being a green replacement for steel, wood is the economic pillar of many Quebec regions. The federal government has chosen to subsidize the automobile industry to the tune of billions of dollars while doing almost nothing to support Quebec’s forest industry; for example, it could offer loans and loan guarantees. The Bloc Québécois put forward recommendations designed to implement a comprehensive support and modernization policy for the forest industry. The ball is now in the federal government’s court. The budget will show us whether it heard the appeal of the Committee and of the Bloc Québécois.
Quebec’s economy is characterized by the presence of innovative businesses in leading-edge sectors. Whether in the aeronautics, aerospace, biomedical or computer sector, Quebec is winning a place for itself in the front ranks of innovative industries. However, because of the intense international competition, Quebec industries must be able to count on government support to continue innovating and expanding globally. The Bloc Québécois proposed a comprehensive strategy on innovation that was not adopted by the Committee. Innovation, no matter what the sector, necessarily depends on education. This is why the Bloc Québécois continues to call on the federal government to reinvest in the CST the amounts required to bring the Transfer back up to the indexed level it reached before the cuts of the mid-1990s. If that happened, the Quebec government would have available to it the necessary margin of manoeuvre to invest in training and guarantee a certain level of prosperity. To remain in the front ranks of innovative industries, it is imperative that our enterprises enjoy a head start in technology development. This is why the Bloc Québécois proposed a refundable scientific research and experimental development tax credit, payable quarterly so that enterprises would have the support they need to develop new products through the pre-marketing phase (when they are generating no profits), while encouraging maintenance of research expenditure during economic slowdowns. Once again, the Committee refused to recommend our idea. Lastly, the Bloc Québécois proposed the introduction, improvement and expansion to all innovative sectors of the Technology Partnerships Canada program, which was cancelled by the Conservatives. The Committee did not follow up on this, so it would be surprising if the government, in its next budget, adopted the Bloc Québécois’s proposals for supporting innovative sectors.
The increased global competition has hurt Quebec’s manufacturing sector badly. Regrettably, the federal government, although it has the tools to temper the effects of foreign competition on home-grown enterprises, has often preferred a laissez-faire approach. What is more, the Conservative government in its last budget amended the Investment Canada Act to bring the automatic review threshold to $1 billion. As a result, any foreign takeover where the value of the transaction is less than $1 billion can be put through without the government’s having to assess whether it is beneficial for the economies of Quebec or Canada. The Bloc Québécois tried vainly to convince the Committee of the need to recommend to the government that the threshold be lowered, and that transactions be approved only if they would actually be good for the economy and for workers. Nor did the Committee adopt our recommendations on modernizing antidumping legislation so that traditional sectors could, within the limits of our international trade agreements, be protected; or our recommendation that government procurement be used to promote local development, again while respecting our international agreements. The measures proposed by the Bloc Québécois would require very little in the way of new spending, but they would give the Quebec economy a definite boost. It is the government’s duty to consider these measures when preparing its next budget.
The past year has been marked by major setbacks in intergovernmental fiscal relations. Quebec is losing more than $1 billion annually in equalization following the federal government’s unilateral decision to cap the formula. What is more, Ontario is enjoying special treatment in the way the federal government calculates the revenues of its hydroelectric corporations. If the federal government gave Hydro-Québec the same treatment, the Quebec government would receive a supplementary transfer of $250 million annually. As the defender of Quebec’s interests, the Bloc Québécois attempted to convince the Committee to rectify these flagrant injustices. Unfortunately, the Committee did not see fit to propose any such measure to the federal government. The Committee also persisted in supporting the government’s plan for setting up a single securities commission, despite the disastrous consequences for Montreal’s financial sector. The Committee’s decision flouts the unanimous will of the National Assembly and rides rough-shod over an area of jurisdiction exclusive to Quebec and the provinces. In a similar spirit of predatory federalism, the Committee refused to recommend that the government eliminate once and for all the federal spending power in areas of jurisdiction of Quebec and the provinces. Lastly, the federal government is still denying Quebec fair compensation for the sales tax it harmonized 18 years ago, while Ottawa has just agreed to pay billions of dollars in compensation to Ontario and British Columbia for their PST harmonization. The federal government must respond to the Bloc Québécois’s recommendations; anything else would be disrespect for the Quebec nation.
Economic growth must not benefit only those members of society who are already well off. The government has a duty to guarantee a social fabric that helps people struggling with certain kinds of difficulties. With a view to ensuring such social justice, a fundamental value of the Quebec nation, the Bloc Québécois proposed an enhancement of the Employment Insurance program. While the Committee retained some recommendations designed to improve the program, the Bloc Québécois considers that an in-depth reform is necessary if the program is to respond adequately to the needs of the unemployed. The government must allow for this in its next budget. In addition, for several years now the Bloc Québécois has been fighting to make sure that our poorest seniors are entitled to a minimum of dignity. Deplorably, the federal government continues to deny older people the right to an income that would enable them at least to reach the poverty line. This is all more unacceptable in that the federal government has short-changed seniors of over $3 billion by not paying them GIS to which they are entitled. It is incomprehensible that the government would refuse to increase GIS payments so that seniors can be rescued from indigence, just as it is disgraceful that the government would line its pockets with money owed to the poorest members of the community. The Bloc Québécois proposed recommendations for correcting this state of affairs, but unfortunately the Committee rejected them. Let us hope that the federal government will follow up on them in its next budget.
Developed-nation status enables the citizens of Quebec and Canada to enjoy great material prosperity. These privileges come with a moral obligation to do our share to encourage development in the poorest countries. When the Liberals were in power, they promised that international development assistance would reach 0.7% of GDP by 2015, consistent with the Millennium Development Goals. The promised funding has never materialized. The arrival in office of the Conservatives has not altered the situation, far from it: fixated on arms rather than development, the government has done nothing about achieving its international development assistance objectives. The Bloc Québécois nevertheless managed to convince the Committee to recommend to the government that it increase foreign aid rapidly toward the goal of 0.7% of GDP, though it would be surprising if the government changed tack in its next budget. Also, it is incredible that the federal government can continue to sanction the use of tax havens by Canadian and Quebec enterprises. Despite talking a good game, the government has never amended the Income Tax Act to close all loopholes so that the richest individuals and corporations would have to pay their fair share of income tax. The Committee did not adopt the Bloc Québécois’s proposals on this problem, preferring a watered-down approach with no real bite. At a time when it is running deficits, the federal government should take advantage of its next budget to put an end once and for all to the use of tax havens.
Quebec produce occupies a place in Quebeckers’ hearts as well as on their plates. Whether we are talking about Lac-Saint-Jean blueberries, Matane shrimp, lobster from the Magdalen Islands, Charlevoix lamb, fine cheese or Quebec pork, Quebec is clearly home to a long tradition of enjoying local farm produce. Agriculture is important to both our economy and our taste buds, and to safeguard its development the Bloc Québécois presented a comprehensive assistance program for supporting this sector. Unfortunately, the Committee refused to adopt most of the Bloc Québécois proposals. It did, however, at the instigation of the Bloc Québécois, propose incentives to encourage the next generation of farmers, support farm incomes and assist the fisheries sector. The Bloc Québécois will be maintaining pressure on the government to act in Quebec’s interests when drawing up its next budget.
Quebec’s culture is the heartbeat of our nation. It is through its culture that Quebec reaches out to the world. The creative genius of Quebec’s artists enables them to contribute actively to Quebec’s economic development while allowing us to assert our own identity loud and clear in the middle of the Anglo-Saxon sea that is North America. The cultural cuts made by the Conservative government constitute a direct attack on Quebec culture. To put an end to the absurdity of the federal government’s having financial and regulatory powers over Quebec culture, the Bloc Québécois submitted recommendations to the Committee for transferring funding and powers in this area to Quebec so that we can control our own communications and culture. The Committee did not accept these recommendations. It did adopt some Bloc Québécois proposals, particularly with regard to increased investment in the cultural sector, but it rejected income averaging for artists. The Bloc Québécois will continue to defend Quebec culture and pressure the federal government to accede to these demands in its next budget. |